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Section 132: Use of proceeds of sale or transfer of Board, etc.,

Electricity Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2003
Section 131 All 185 Sections of Electricity Act Section 133

Legal Commentary & Landmark Judgments: Section 132

Section 132 of the Act regulates the use of proceeds of sale or transfer of Board property, requiring the State Government to apply such funds towards power sector development, retiral funds, and fiscal restructuring.

  • Ring-Fenced Application of Divestment Proceeds: Mandates that proceeds realized from the sale, transfer, or privatization of electricity board assets must be reinvested in the power sector.
  • Protection of Pension & Retiral Deficits: Prioritizes the funding of employee terminal benefits, pension trusts, and gratuity deficits out of asset sale proceeds.
  • Prohibition Against Diverting Proceeds to General Budget: Prevents state finance ministries from absorbing power utility asset revenues into general administrative spending.
Key Landmark Precedents:
  • State of Gujarat v. Essar Power Ltd. (2008) 4 SCC 755: Supreme Court affirmed that restructuring proceeds are dedicated by statute to stabilizing power sector infrastructure and protecting employee retiral dues.
  • Moser Baer Karamchari Union v. Union of India (2023) 9 SCC 275: Reaffirmed the supreme statutory priority accorded to worker retiral and pension funds in corporate restructuring.
  • Brihanmumbai Electric Supply v. MERC (2013) 4 SCC 71: Affirmed the fiduciary nature of public utility property management.
Courtroom Practice & Strategic Litigation Guidance:

Trade unions litigating pension trust shortfalls following utility privatization should invoke Section 132 to compel the State Government to allocate asset sale proceeds to liquidate actuarial deficits in the pension fund.

Section 131 All 185 Sections of Electricity Act Section 133